2018 fourth costliest year in insured losses

Regrettably, 10,400 people around the world lost their lives in natural disasters this year. This groups 2018 with the years 2016, 2014, 2000, and three other years in the 1980s, in which the victim toll was around 10,000. Geophysical events accounted for 34 percent of all fatalities. This is much lower than the 49 percent figure over the period 1980–2017. Storm events claimed 24 percent of the victims, roughly the same as the 26 percent average since 1980. However, the picture was very different for the number of lives lost in flood events; this year’s figure of 35 percent was substantially higher than the 14 percent average. The reason for this was large-scale flood events in Asia and Africa.

Earthquakes with and without tsunamis in August, September and December in Indonesia claimed the lives of over 3,000 people. These proved to be the events with the highest number of fatalities in 2018, followed by floods in India, Japan and Nigeria. Worldwide, 273 people were killed in wildfires over the course of the year. This is the second-highest number in the time series since 1980 and is only surpassed by the extensive fires in Indonesia in 1997, which claimed the lives of 375 people. Heading the list in 2018 were fires in Greece with 100 fatalities and the US with 108.

Number of eventsThe Munich Re NatCatSERVICE registered 850 events in 2018. Geophysical events such as earthquakes, tsunamis and volcanic eruptions accounted for 5 percent of the total. Storms made up 42 percent, floods, flash floods and landslides 46 percent, while 7 percent fell into the categories of heat, cold and wildfire. Generally speaking, the distribution followed the long-term trend towards a greater number of storms and floods. The continents most affected were Asia (43 percent), North America (20 percent) Europe (14 percent) and Africa (13 percent).

Munich Re categorizes events from small loss to major disaster according to overall losses and/or number of victims. On this basis, 12 percent of events in 2018 fall into the highest categories 3 and 4 (severe events and catastrophes). Category 2 makes up 28 percent and category 1 (small-scale loss events) 60 percent. This continues the trend towards a greater number of small-scale, high-frequency events with a lower magnitude of loss. This is the category most strongly influenced by reporting, and is therefore subject to the greatest uncertainty.

The year in figures – Regional North America (including Central America and the Caribbean)North America was badly hit by two types of event in particular. Firstly, the 2018 hurricane season again resulted in high losses of $31bn, of which $15bn was insured. Hurricanes Michael and Florence were responsible for the bulk of the burden. These losses are admittedly far short of the record overall loss of nearly $230bn in 2017 and insured losses of $93bn. In addition, billion-dollar losses resulted from major wildfires, such as the Carr Fire that devastated California in July/August and the Camp and Woolsey Fires of November. Taken together, these events caused overall losses of $24bn, of which $18bn was insured. A total of 110 people were killed in 15 major wildfires.

163 natural catastrophe events were registered across the American continent, producing overall losses of $82bn, of which $53bn was insured. More than 800 people lost their lives. The highest number of fatalities was 165 from the de Fuego volcanic eruption in Guatemala. A heatwave in Canada in June and July, mainly affecting the greater Montreal region, pushed temperatures above 35°C. It is anticipated that there will have been an additional 100 fatalities from this event when compared with average annual mortality.

South AmericaSouth America experienced an extremely low number of natural disasters in 2018. The NatCatSERVICE database registered just 51 significant events. A total of 144 people were killed and losses amounted to some $1bn. There were 72 hydrological events, consisting primarily of flooding, flash floods and landslides. Other categories included storms (20 percent), earthquakes (6 percent) and climatological events (around 2 percent).

Europe Europe can look back on a loss year that was similar to 2014, 2015 and 2017, with a total of 113 events and overall losses of $16bn (€13.5bn). Some $6bn (€5bn) was paid out in insured losses. In particular, the severe drought that affected large areas of Europe in 2018 resulted in widespread losses in agriculture and forestry. This drought produced an overall loss of around $3.9bn (€3.3bn), making it the year’s costliest event in Europe. Only a small portion of this ($280m or €230m) was insured. In addition, two winter storms, Friederike and Burglind, swept across Europe in January, leaving in their wake overall losses of $4bn (€3.1bn), of which around $3bn (€2.4bn) was insured. In mid-October, the remnants of Tropical Storm Leslie battered France, Portugal and Spain. With wind speeds of up to 170 km/h, accompanied by heavy rainfall, the $350m (€310m) in property damage was mainly caused by flash floods and landslides. Roughly $50m of the total was insured. Shortly afterwards, a further storm developed that primarily affected Italy, Croatia and Slovenia along the Adriatic coast. In some cases, strong gusts of the local Bora wind swept over coastal regions. Losses came to $3.5bn (€3bn), making this the second-costliest event in Europe after the drought. The deadliest events in 2018 also included the wildfires in Greece, which claimed 100 lives, and a cold snap in February and March that led to 77 fatalities.

AfricaAround 100 significant events were registered for the continent of Africa. Almost 1,200 people were killed, the majority in flood events and flash floods in Nigeria and Kenya. Overall losses for 2018 are estimated at $1.4bn. Because of the low insurance density, however, insured losses are extremely low.

AsiaAsia was the worst-affected continent in terms of the number of events. It accounted for 43 percent of all events worldwide and for 74 percent of fatalities in 2018. Overall losses came to $59bn. This corresponds to roughly 37 percent of the global loss burden. $18bn of the total was insured, which corresponds to just 24 percent of insurance industry payouts worldwide. A total of 7,750 people lost their lives in natural disasters in the region, with Japan and Indonesia particularly affected.

In Japan, even though just 14 events were registered, these included five events with losses in excess of one billion dollars. In July, intense rainfall led to flooding, accompanied in some cases by severe flash floods and landslides in a number of major cities, including Hiroshima, Kyoto and Osaka. Overall losses came to $9.5bn and insured losses to $2.4bn. In September, the two tropical storms Jebi and Trami made landfall, causing widespread devastation. Here too, losses mounted up, and together the two storms produced overall losses of $15.9bn, with insured losses of roughly $11.6bn. Two earthquake events also accounted for a substantial portion of the loss burden. In June and September, quakes struck the prefectures of Osaka and Hokkaido, pushing losses up by a further $9bn. Japan suffered $34bn in losses from natural disasters in 2018, of which $16bn was insured.

Indonesia was hit extremely hard by tsunami events. These were triggered by earthquakes and undersea landslides that occurred on the slopes of the active volcano Anak Krakatau. In September, a tremor near the city of Palu and a subsequent tsunami killed more than 2,000 people and caused billions of dollars in property damage. Towards the end of the year, a further tsunami occurred after the volcano Anak Krakatau erupted. An underwater landslide triggered a tsunami that claimed more than 400 victims. The loss for insurers is likely to be slight, as few of those affected were insured. Higher insurance penetration in such countries could help them deal more swiftly with the financial consequences of natural disasters.

Australia/OceaniaAround 40 events in Australia and Oceania caused overall losses of approximately $1.5bn, of which $540m was insured. On 20 December, a hailstorm in Sydney caused insured losses of at least $200m, making it one of Australia’s ten largest hail losses of all time. Smaller losses were incurred in Australia and New Zealand from cyclones, storms, wildfires and flash floods. Overall losses from individual events, such as the earthquake in Papua New Guinea in February, and Cyclone Gita on Tonga, remained in the low hundreds of millions of dollars. 164 people lost their lives in the region, the majority of them in the earthquake on Papua New Guinea.